Attached files
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EX-10.1 - Sentio Healthcare Properties Inc | v170572_ex10-1.htm |
EX-99.1 - Sentio Healthcare Properties Inc | v170572_ex99-1.htm |
EX-10.2 - Sentio Healthcare Properties Inc | v170572_ex10-2.htm |
EX-99.2 - Sentio Healthcare Properties Inc | v170572_ex99-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
December
30, 2009
CORNERSTONE
GROWTH AND INCOME REIT, INC.
(Exact
name of registrant as specified in its charter)
Maryland
|
333-139704
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20-5721212
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(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification
Number)
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1920
Main Street, Suite 400
Irvine,
California 92614
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(Address
of principal executive offices)
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(949)
852-1007
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions.
o
|
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
|
o
|
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14d-2(b)
|
o
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)
|
o
|
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)
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Item
1.01. Entry into a Material Definitive Agreement
On December 30, 2009, through an
indirect, wholly-owned subsidiary, we entered into a definitive purchase and
sale agreement in connection with the acquisition of the Greentree at Westwood
property described in Item 2.01. The information set forth under Item
2.01 relating to the terms of the Greentree at Westwood purchase and sale
agreement is incorporated by reference herein.
On December 31, 2009, through an
indirect, wholly-owned subsidiary, we entered into a definitive purchase and
sale agreement in connection with the acquisition of the Mesa Vista Inn Health
Center described in Item 2.01. The information set forth under Item
2.01 relating to the terms of the Mesa Vista Inn Health Center purchase and sale
agreement and the information set forth under Item 2.03 regarding the financing
arrangements entered into in connection with the acquisition is incorporated by
reference herein.
Item
2.01. Completion of Acquisition or Disposition of
Assets.
Greentree
at Westwood
On
December 30, 2009, we purchased an existing assisted–living facility, known as
Greentree at Westwood, from Greentree at Westwood, LLC, an unaffiliated party,
for a purchase price of approximately $5.2 million. The acquisition
was funded with net proceeds raised from our ongoing public offering but we may
later place mortgage debt on the property. Under the purchase and sale
agreement executed in connection with the acquisition, a portion of the purchase
price for the property is to be calculated and paid to the seller as earnout
payments based upon the net operating income, as defined, of the property during
each of the three-years following our acquisition of the
property. The maximum aggregate amount that the seller may receive
under the earnout provision is $1.0 million.
The
Greentree at Westwood consists of 58 assisted living units in an approximately
49,000 square-foot, three-story facility situated on approximately 4.5 acres of
land in Columbus, Indiana. The facility was built in 1998. The
property is currently 91.4% occupied, and has experienced average monthly
occupancy of above 88% since January, 2008. Greentree at Westwood will continue
to be managed by Provision Living.
We do not
intend to make significant renovations or improvements to the property and
believe that the property is adequately insured. To qualify as a REIT, we cannot
directly operate assisted-living facilities. Therefore, we have
formed a wholly owned taxable REIT subsidiary, or TRS, and Greentree at Westwood
will be operated pursuant to a lease with our TRS. Our TRS has engaged an
unaffiliated management company to operate the assisted-living
facility. Under the management contract, the manager has direct
control of the daily operations of the property.
Mesa Vista Inn Health
Center
On
December 31, 2009, we purchased a skilled nursing facility, known as the Mesa
Vista Inn Health Center from SNF Mesa Vista, LLC, an unaffiliated party, for a
purchase price of approximately $13.0 million. The acquisition was
funded with net proceeds of approximately $5.5 million raised from our ongoing
public offering and the assumption of $7.5 million of debt financing under the
seller’s existing mortgage loan on the property. The terms of the
assumed mortgage loan are discussed under Item 2.03 below.
Mesa
Vista Inn Health Center is a 96-unit, 144-bed, skilled nursing facility situated
on approximately 6.4 acres of land in San Antonio, TX. The
approximately 54,000 square-foot facility, which was built in 2008, is 100%
net-leased to PM Management – Babcock NC, LLC, an affiliate of Harden
Healthcare, LLC. The lease has a 15-year term and provides for annual
rent of 11.5% of the acquisition price, paid in monthly installments. Harden
Healthcare has agreed to provide certain credit enhancement to
the lease, including a security deposit. Harden Healthcare,
through its affiliates, provides a continuum of services addressing a range of
healthcare needs including rehabilitation, home healthcare, assisted living,
skilled nursing, pharmacy services and hospice care. TriSun
Healthcare, LLC, an affiliate of Harden Healthcare, will continue to operate the
property.
We do not
intend to make significant renovations or improvements to the property and
believe that the property is adequately insured. Since the Mesa Vista
Inn Health Center is leased to a single tenant on a long-term basis under a net
lease that transfers substantially all of the operating costs to the tenant, we
believe that financial information about the tenant is more relevant to
investors than financial statements of the property
acquired. Summarized financial information of the lessee will be
provided in the notes to our consolidated financial statements.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
On
December 31, 2009, in connection with the acquisition of the Mesa Vista Inn
Health Center, we entered into an assumption and amendment of an
existing mortgage loan with PlainsCapital Bank. Pursuant
to the assumption agreement, we assumed the outstanding principal balance of
$7.5 million. The loan matures on January 5, 2015 and bears interest at a
fixed rate of 6.50% per annum. We paid a 1% commitment fee related to
this loan. We may repay the loan, in whole or in part, on or before
January 5, 2015 without incurring any prepayment penalty. Principal
and interest on the loan are due and payable in monthly installments of $56,335
until the maturity date, when the entire remaining balance of principal and
accrued interest is due, assuming no prior principal prepayment.
Item
9.01. Financial Statements and Exhibits.
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(a)
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Financial
statements of businesses acquired. Audited financial
statements for Greentree at Westwood will be filed by amendment to this
Form 8-K no later than March 17,
2010.
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(b)
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Pro
forma financial information. Unaudited pro
forma financial information will be filed by amendment to this Form 8-K no
later than March 17, 2010.
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(d)
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Exhibits.
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10.1
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Purchase
and Sale Agreement, by and between Greentree Acquisition, LLC, a Delaware
limited liability company and Greentree at Westwood, LLC, an Indiana
limited liability company, dated December 30,
2009
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10.2
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Purchase
and Sale Agreement, by and between MVI Health Center, LP, a Delaware
limited partnership and SNF Mesa Vista, LLC, an Texas limited liability
company, dated December
31, 2009
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99.1
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Press
release dated December
30, 2009
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99.2
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Press
release dated December
31, 2009
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORNERSTONE
GROWTH & INCOME REIT, INC.
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Dated: January
6, 2010
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By:
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/s/ SHARON C. KAISER
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Sharon
C. Kaiser,
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Chief
Financial Officer
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